SHANGHAI - Global mining company Rio Tinto and the Aluminum Corporation of China (Chinalco), China's largest aluminum producer, have finished setting up a joint venture to develop and operate the Simandou iron ore project in West Africa.

The joint venture has already been approved by Chinese authorities, sources from Rio Tino said Thursday.

In July 2010, the Aluminum Corporation of China Limited (Chalco), a listed arm of Chinalco, inked an agreement with Australia's Rio Tinto to set up a joint venture for the development of the Simandou iron ore mine in Guinea, West Africa.

According to the agreement, Rio Tinto and Chinalco will hold 53 percent and 47 percent stakes, respectively, in the joint venture, which translates into a 50.35-percent and 44.65-percent interest in the Simandou project, the sources said. The remaining 5-percent stake will go to the International Finance Corporation, a member of the World Bank Group.

The Guinean government has retained its options for participation in the project and is expected to take up its first share in the near future, the sources said.

A consortium led by Chinalco paid Rio Tinto $1.35 billion for the deal.

The Simandou iron ore project, an unexploited iron ore mine with significant potential, is expected to go into operation by the end of 2014 and start delivery in 2015.

The mine is estimated to have an annual iron ore capacity of approximately 70 million tons.